What does contingent mean in real estate? This is a question that many people ask when they are looking to buy or sell a property. In most cases, contingent means that the sale of the property is dependent on the sale of another property. If the other property doesn’t sell, then the first property will not be sold either. In this blog post by GCG Real Estate, we will go over everything you need to know about contingent real estate transactions!
What Does Contingent Mean in Real Estate?
A contingent real estate transaction usually means that the sale of a property is dependent on the sale of another property. In other words, if the first property doesn’t sell, then the second one won’t either.
This type of contingency is often seen in real estate transactions where two parties are selling and buying properties simultaneously. For example, let’s say that Party A is selling their house to Party B.
However, Party B is also selling their house to Party C. If the sale of Party B’s house falls through, then the sale of Party A’s house will also fall through.
There are other types of contingencies that can be included in real estate contracts as well. Some common ones include financing contingencies, inspection contingencies, and appraisal contingencies.
Financing contingency means that the sale is contingent on the buyer being able to secure financing for the property.
Inspection contingency means that the sale is contingent on the buyer being satisfied with the results of a home inspection.
Appraisal contingency means that the sale is contingent on the property appraising for a certain value.
If you are involved in a real estate transaction that has a contingency, it’s important to understand what type of contingency it is and what it means for you.
If you are selling a property, you will want to make sure that all clauses have been met before moving forward with the sale. If you are buying a property, you will want to be aware of any contingencies so that you can plan accordingly.
Risks of Adding Contingencies to a Real Estate Contract
While contingencies can protect buyers and sellers in a real estate transaction, there are also risks associated with them.
One of the biggest risks is that the sale may not go through at all. If one of the parties involved in a sale is unable to meet their obligations, then the whole deal can fall apart. This can be especially frustrating for the other party who was counting on the sale going through.
Another risk is that contingencies can lengthen the process of buying or selling a property. If a buyer has to get financing in order to buy your property, that could take weeks or even months. The same is true for inspections and appraisals. All of these things take time, and they can delay the sale of a property.
In certain housing markets, they can prevent you, as a buyer, to back out from a deal. If your offer is competing with several other offers, consult a real estate agent to better understand what contingencies to include.
As a buyer or seller, it’s important to weigh the risks and benefits of adding contingencies to a real estate contract. In some cases, they may be necessary in order to protect your interests. However, you should also be aware of the potential drawbacks before moving forward with a contingent sale.
Can You Put an Offer On a Contingent House?
If you’re interested in buying a house that is already under contract, you may be wondering if you can put an offer on a contingent real estate property. The answer is yes, but there are a few things to keep in mind.
First of all, it’s important to understand what type of contingency the other contract has. If it is something like financing or inspection, then there’s a good chance that your offer will be accepted.
However, if the contingency is something like an appraisal, then the seller may be less likely to accept your offer.
Another thing to keep in mind is that you may have to wait a while before you can move into the house. This is because the other contract has to be completed first. If everything goes according to plan, then you should be able to move into the house within a few weeks. However, if there are any delays, it could take longer.
Contingencies are a common part of real estate contracts. They can protect buyers and sellers, but there are also risks associated with them. If you’re involved in a contingent sale, it’s important to understand what type of contingency it is and what it means for you as an investor/buyer.